Circular Economy

The background section highlighted the societal shift over time towards a more environmental conscious economic growth. CE is considered a school of thought which is still under construction and is a notable component for attaining a sustainable progression. Rather than approaching goods and materials in a linear process of “cradle-to-grave”, the approach of CE is to manage the goods and materials in the perspective of “cradle-to-cradle”. This means that goods and materials do not lose their value in the end of their life, but will continued to be utilized. The essence of CE is to close the loop by reducing inputs and add an output of resources aiming to keep existing resources in the loop for circulation. Closing the loop would avoid depletion and constraint on natural resources, as well as reduce pollutions, while allowing

us to continue our consumption and utilization of already existing products and materials (Winans, Kendall, & Deng, 2017).

Figure 3: “Conceptual diagram illustrating the Circular Economy in a simplified way" (European Commission, 2018, p. 9).

Figure 3 illustrates the circularity of material flow, where the inputs of raw materials are entering the circulation of design, production, distribution, and consumption. The material will be used, repaired and reused within the consumption stage, before becoming waste to be collected. The waste is then collected for recycling, limiting the residual waste, and entering the loop again as raw materials. Here, the influx of raw materials will be reduced, while also reducing the residuals exiting the loop (European Commission, 2018). The theory behind closing the loop originates from a belief that there is a more efficient way to utilize already extracted natural resources, and that wasted materials has value (Cobo, Dominguez-Ramos, &

Irabien, 2018). Cobo et al. (2018), explain a closed loop to be a process where recycling of a resource is reversible, and explain the concept of “close-loop recycling” with the following example:

A case of closed-loop recycling occurs when a glass bottle is recycled into a glass jar, because the glass jar could be recycled back into a glass bottle with the same functionality as the original one, whereas recycling PET bottle into PET fibres is an example of open-loop recycling; it is an irreversible process. (Cobo et al., 2018, p. 280)

The processes of downcycling and upcycling within CE, can be compared to the open-loop- and closed-loop recycling concepts. While downcycling refers to the process of recycling a

“material into a lower valued product, [will upcycling] involve a change in the fundamental properties of the material, like its physical structure or its chemical composition” (Cobo et al., 2018, p. 280).

Central to the concept of CE is the aspect of recycling, in addition to the ability to reduce and reuse resources. According to Ghisellini, Ripa, and Ulgiati, (2018), a CE is promoting recycling and reuse of “materials, goods and components in order to decrease waste generation” (p. 618).

Kirchherr, Reike, & Hekkert (2017) continues by explaining that reduce can be done at manufactory level with increased production efficiency, hence reducing consumption. Reuse is a part of expanding the life of a product by transferring it to a new user that finds value in the product. At last, recycle, which is considered to be “process materials to obtain the same (high grade) or lower (low grade) quality” (Kirchherr et al., 2017, p.224). The principles of reduce, reuse and recycled are often referred to as the 3R’s, although much debated, there is the presence of a 4^th R⁵; Recover (Kirchherr et al. 2017). According to Kirchherr et al. (2017), recovery is referred to as recovering material to energy through incineration and is considered to be both a part of a linear economy as well as an aspect within CE. Recycling, reusing, and recovering of materials can all be interlinked by assuming that if a product can be recycled, it indicates that parts of the product can be reused (although perhaps into something different), and this again indicates that the materials which are being reused have also been recovered. The aspect of reduce can then be considered separate from the other 3R’s. However, if reduce is not a possibility, the materials can be recovered from waste and recycled into a new product or into

5 The 4^th R will be included in this analysis because we found it to be a re-occurring element, as common as reuse, reduce and recycle in our literature. Thus, it is amongst the most relevant additions to the 3R’s given in the literature.

new development. This leads us in to the essence of CE, which is to close the loop altogether (Kirchherr et al., 2017).

The concepts of reuse, recycle, and recover have long been in focus of EE, however the key component of reduce in CE have been left out of EE. The objective for CE is to reduce the consumption of energy input, waste, and emission output, and close the loop on production and consumption of raw materials (Callan & Thomas, 2013; Cobo et al., 2018; Kirchherr et al., 2017). Korhonen, Honkasalo, and Seppälä (2018) emphasizes the economic aspect of CE and state that there should be an economic incentive and guideline behind the notion. The focus should include energy, material, and emission control cost, as well as include public image and environmental taxation risk. This will further employment and efficient use of already existing material through a sharing economy encouraging cooperative use of goods and services.

According to Lacy and Rutqvist (2015) it is estimated that $1 trillion in waste is lost annually.

The economic impact of recycling can be highlighted by looking at plastic packaging material;

it is estimated that $80-120 billion is lost to the economy annually of its value. Additionally, 32% of the packaging is estimated to escape collection, and rather drift towards urban infrastructure and the ocean. Only 14% of the collected waste goes towards recycling, where at the end of the recycling process only 5% of plastic packaging is actually recycled (Neufeld, Strassen, Sheppard, & Gilman, 2016). Another economic example illustrating what can be gained in a CE is through the measures done by Walmart. “In 2012 more than 80 percent of its waste was diverted from landfills […] returned more than $230 million to the business” (Lacy

& Rutqvist, 2015 p. 58).

According to Stahel (2016), there are large benefits of implementing CE, both economic and environmental benefits. The study conducted on seven European nations found that GHG emission would reduce by up to 70 percent for each of the countries as a result of a shift toward CE. Furthermore, the articles stated that it would increase the workforce by 4 percent, and positively influence Gross Domestic Product (GDP) for a country. Not only is it environmentally and economically beneficial for a focus towards CE, it could also be debated to increase quality of life, as we decrease extraction of raw materials and then pollution as a consequence (Stahel, 2016).

An obvious limitation of looking at CE are the lack of consensus on the definition of the concept. In an attempt to grasp an overall understanding of the concept, and to get an

understanding of areas of development outside of our metanalysis, we went through a number of definitions. The variations in definitions of the term CE will, according to Kirchherr et al., (2017), eventually lead to the collapse of the concept. As we noticed from the definitions mentioned by Kirchherr et al., (2017), few of them included the aspect of consumer responsibility and their consumption of materials, service, and resources. Furthermore, few mention sustainability as a part of the CE vision, as well as disregarded recovery as one of the R’s (Kirchherr et al., 2017). Recorded by Ghisellini, Cialani, and Ulgiati (2016) “the promotion of consumer responsibility is crucial for enhancing the purchase and use of more sustainable products and services” (p.19). This implies that there is a need for a prominent focus on consumer processes in the CE, along with concern regarding production and distribution of resources. It is also stated by some authors that reduce is an essential role in CE. If implementations of CE is based on definitions that excludes the part of reduce, reuse, and recycle, then the implementation will be unsustainable and considered “business-as-usual”.

This is because all of the R’s are essential in order for CE to break ground and make a change towards a more sustainable future (Kirchherr et al., 2017).